Facts
Tanduay Distillery, Inc. filed with the Bureau of Internal Revenue (BIR) an application for tax
credit in the amount of P180,701,682.00 on September 17, 1987, for its erroneous payments of
ad valorem taxes from January 1, 1986 to August 31, 1987. According to them, based on the
BIR ruling they should have not been liable for ad valorem taxes because of being a rectifier of
alcohol. Upon application, a memorandum was issued by Aquilino Larin of the Specific Tax
Office to the Revenue Accounting Division (RAD), headed by Potenciana M. Evangelista, and
was received by Revenue Administrative Section (RAS), a subordinate office of the RAD to
verify whether such taxes were actually paid as ad valorem to the BIR. After verifying, the RAS
prepared a certification,signed by Evangelista, stating that Tanduay made tax payments
classified under Tax Numeric Code (TNC) 3011-0001 totalling P102,519,100.00 and payments
classified under TNC 0000-0000 totalling P78,182,582.00.
In addition to the certification issued by RAD, Teodoro Pareño, head of the Tax and Alcohol
Division certified to Justino Galban, Jr., Head of the Compounders, Rectifiers and Repackers
Section, that Tanduay was a rectifier not liable for ad valorem tax. Pareño then recommended to
Larin that the application for tax credit be approved. On the basis of the certification and
verification on the status of taxes paid by Tanduay. Tax Credit Memo No. 5177 in the amount of
P180,701,682.00 was signed by Deputy Commissioner Eufracio D. Santos
Then, a letter-complaint written by Ruperto Lim to then BIR Commissioner Bienvenido Tan, Jr.
alleging that the grant of Tax Credit Memo No. 5177 as irregular and anomalous. Due to this,
Larin, Pareño, Galban and petitioner Evangelista were charged before the Sandiganbayan with
violation of Section 268 (4) of the National Internal Revenue Code and of Section 3 (e) of R.A.
3019, the Anti-Graft and Corrupt Practices Act. Evangelista filed a petition, however, was found
guilty of gross negligence in issuing a certification containing TNCs code only without the
meaning in words. The Court affirmed petitioner’s conviction in Criminal Case No. 14209, i.e.,
for violation of Section 3 (e) of the Anti-Graft and Corrupt Practices Act.
Petitioner filed a Motion for reconsideration hence, the case at bar.
Issues
1. Whether the petitioner is guilty of gross negligence thus had violated Section 3 (e) of the
Anti-Graft and Corrupt Practices Act.
Disposition
1. No. According to R.A 3019, Section 3, paragraph (e), as amended, states that a public
officer should have acted by causing any undue injury to any party, including the
Government, or by giving any private party unwarranted benefits, advantage or
preference in the discharge of his functions. The Court held that the petitioner did not
cause any undue injury to the government because the issuance of certification is
merely a Nullum crimen nulla poena sine lege and should not be construed as criminal
act. The Court further provides that the petitioner had indicated only the TNC codes and
the omission of what the codes mean is not negligence on her part because as BIR
employees it is expected of them to know the different codes used in the handbook of
numeric codes of revenue sources. What was written in the certification are the code
TNC 3011-0001 totalling P102,519,100.00 and under TNC 0000-0000 totalling
P78,182,582.00 which stands for specific tax and for unclassified taxes respectively. The
TNC number for ad valorem however is TNC No. 3023-2001. Clearly, if the BIR officers
had known what taxes are specified in the certification they would not have
recommended the granting of tax credit. Causing injury to the Government or
unwarranted benefit for Tanduay therefore was not met for the petitioner to convict for
gross negligence. In fact it is quite the opposite for the reason that she had indicated that
Tanduay did not pay ad valorem tax and should have been interpreted by the BIR
officers as not qualified for tax credit. Unfortunately, the BIR officers still recommended
for tax credit because of not having knowledge with the TNC numbers set in the BIR
handbook. The Court therefore found the petitioner’s act as not in violation of Section 3
(e) of the Anti-Graft and Corrupt Practices Act.
As a whole the Court had granted the motion for reconsideration by the petitioner and had set
aside her conviction in Criminal Case No. 14209, i.e., for violation of Section 3 (e) of the Anti-
Graft and Corrupt Practices Act
